annuity vs. cash out with new automatic rollover IRA

[Guest planman]

Our money purchase plan will be reducing the cash out limit from $5000 to $1000 to comply with the upcoming regulations. We do not want to go the route of automatic rollover IRAs. Since the standard from of payment is a J&S annuity, all vested balances above $5,000 are offered an annuity and all vested balances below receive lump sum cash out. For an annuity, we remove the balance from the plan and purchase an annuity from an insurance carrier who then makes payments to the participant. If we reduce the cash out threshold to $1000, that means all vested balances above $1000 must be offered annuities. Yet no insurance carrier wants to deal with amounts below $5000. What are other plan sponsors doing in this area to deal with the automatic rollover rules?